If a Country Specializes in Goods That It Can Produce

question 90

Multiple Choice

If a country specializes in goods that it can produce most readily and cheaply and trades those goods for the goods that another country can produce most readily and cheaply, then both countries are exercising which of the following principles?

• A) distinctive advantage
• B) comparative advantage
• C) absolute advantage
• D) parallel competencies

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Definitions:

Price Weighted Stock Index

An index in the stock market where the impact of each company’s stock on the index is directly proportional to its share price.

Stock Prices

The cost of purchasing a share of a company's stock, determined by supply and demand in the market.

Divisor

A number that divides into another number, typically referred to in the context of indices calculation in finance.

Money Market Investment

Short-term financial instruments with high liquidity, often used for cash management by investors and companies.